(Figure: Efficiency and Pollution in the Market for Vehicle Emissions) Use Figure: Efficiency and Pollution in the Market for Vehicle Emissions. Assume that firms are the only beneficiaries of pollution and that costs are borne solely by others in per ton of pollution can move this market to the socially optimal quantity of the society. An optimal Pigouvian tax of. pollution. Marginal social cost, marginal social benefit $25 $45 $5 $25 20 17 227 $15 15 12 10 7 5 2 0 MSC MSB 5 10 15 20 25 30 35 40 45 50 55 Quantity of pollution emisions (tons)
(Figure: Efficiency and Pollution in the Market for Vehicle Emissions) Use Figure: Efficiency and Pollution in the Market for Vehicle Emissions. Assume that firms are the only beneficiaries of pollution and that costs are borne solely by others in per ton of pollution can move this market to the socially optimal quantity of the society. An optimal Pigouvian tax of. pollution. Marginal social cost, marginal social benefit $25 $45 $5 $25 20 17 227 $15 15 12 10 7 5 2 0 MSC MSB 5 10 15 20 25 30 35 40 45 50 55 Quantity of pollution emisions (tons)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:(Figure: Efficiency and Pollution in the Market for Vehicle Emissions) Use Figure: Efficiency and Pollution in the Market
for Vehicle Emissions. Assume that firms are the only beneficiaries of pollution and that costs are borne solely by others in
per ton of pollution can move this market to the socially optimal quantity of
the society. An optimal Pigouvian tax of.
pollution.
Marginal social
cost, marginal
social benefit
$25
$45
$5
$25
20
17
227
$15
15
12
10
7
5
2
0
MSC
MSB
5 10 15 20 25 30 35 40 45 50 55
Quantity of pollution emisions (tons)
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